Every accountant is familiar with the pressures that accompanies the month end close. Every finance controller or CFO is required to ensure that all accounts are reconciled and all the number add up. Month close is crucial to ensure that information is provided to decision makers and investors. Closing the books every month requires accounting to liaison with multiple departments. In bigger entities close process is complex. Streamlining Accounts Payable (AP) is an important part of month close process.
Why Accounts Payable is critical?
Vendors are major stakeholders in the success of a business. A team handling AP must :
- Onboard Vendors – with all details
- Raise Purchase Orders- send to vendors
- Track delivery-get confirmation from other departments on delivery from the vendor
- Perform 3 way match-between PO, goods received notes & vendor invoice
- Pay the vendor-as per credit terms.
Accounts payable may be one of the things that a business needs to handle, but it is often the most complex. This is due to multiple levels of approvals that are required from departments like sourcing, production and finance. We have seen many organization rely on emails to run these approvals. Due to this, AP suffers from a lack of visibility. Invoices have to traverse a long road to reach the payment cycle.
It is imperative that the approvals configured within the books of accounts. Zoho Books allows users to set multi-level approvals within the books. This prevents accounting teams from being flooded with emails from other departments.
How to streamline Accounts Payable?
Finance controllers should take a hard look at their department to find areas of improvement. Here is how Accounts Payable can be streamlined:
- Ensure faster approvals to get a clear picture of planned cash outflows
- Use Dashboards to highlight the accounts payable
- Ensure the credit periods are adhered
- Get all the documentation to satisfy audit requirements
- Create a standardized channel to which all vendors submit invoices to reduce lost invoices or duplicate entries
- Set up a vendor/supplier portal so they can view their invoice statuses without taking up AP’s time with phone calls and emails
An efficient bill processing system will ensure that books are closed every month on time and every time. We would love to hear your thoughts, drop us a line here.